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Why Is Broadband More Expensive In the US Than Elsewhere?
mrspoonsi writes "The BBC reports "Home broadband in the US costs far more than elsewhere. At high speeds, it costs nearly three times as much as in the UK and France, and more than five times as much as in South Korea. Why?...'Americans pay so much because they don't have a choice,' says Susan Crawford, a former special assistant to President Barack Obama on science, technology and innovation policy. We deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight."
The telco lobby writes the legislation.
America is the home of capitalism, which means competition, which drives down prices and raises standards. The rest of the world is a socialist hellhole.
It's similar to what the North Koreans believe, with a touch of stockholm syndrome.
âoeIf he needs a million acres to make him feel rich, seems to me he needs it 'cause he feels awful poor inside hisself, and if he's poor in hisself, there ain't no million acres gonna make him feel rich, an' maybe he's disappointed that nothin' he can do 'll make him feel rich.â
â John Steinbeck, The Grapes of Wrath
Politics is Treachery, Religion is Brainwashing
People will pay whatever is charged up to the point that the market will bear. It's not that far off from an unregulated utility at this point. Television content delivery has similarly pulled their prices up through the roof, because people will pay it.
I haven't paid for either service (at least intentionally) since 2009. Under the right circumstances I might be persuaded to get the broadband again, but not cable or satellite television.
In SOVIET RUSSIA... erm...NSA AMERICA, the Internet logs onto YOU!
I live in downtown Bellevue, WA next door to a Microsoft building and within three blocks of two others. Comcast has been at capacity on the block for over six years so they have not offered new service for most of the past decade. CenturyLink offers 2Mbps DSL. It's so slow because of the universal SLiCs that are used in the area due to oversubscription. The city does not allow anyone else to sell on the block. You ever wonder why Microsoft people aren't very pro-Internet? It's because for most of them their Internet access is very slow.
1. Where I live we do have choice between carriers, and it is not even a big city. 2. When I was in a densely populated area, Northern VA, we had choice too. Deregulation to allow competition causes monopolies? No, does not compute. Regulation creates barriers to entry that leans to monopolies or few providers, those who can get the government to protect their territory with police power. ATT was a national monopoly only until the feds allowed competition. Your local utility is only a monopoly as long as your local government makes them one, same with your cable provider, etc.
Time Bomber the Book coming soon.
to buy a congressman than to build a better business. To all those you think America is a free market, go fuck you ignorant self then read up on Mussolini's definition of fascism.
Much like healthcare, most Americans don't have a real choice. I would pay less and get better healthcare and faster internet service if I could.
Why is this? I would guess that it's probably due to monopolies taking advantage of regulations to make competition stay away. Also probably in part to people wanting to watch specific sports and shows, and only being able to get them though one of the major cable/satellite networks. Shows like that are going to be hard for a startup internet company to replicate. Things like piracy, netflix, and itunes alleviates some of these problems, but a lot of people still prefer to get their games live.
There is no oversight in clothing market and yet you can buy a shirt at Wallmart or Ross for $5 or shoes for $10. Why don't they charge $100 for a shirt and keep the difference? It is not government oversight that drives prices down but competition. Telcos are not a good case study of either free market or regulation as they are a special case in a lot of ways.
Negative moral value of force outweighs the positive value of good intentions.
If competition is down, they make more on profit margin. They may benefit, but the consumer suffers the most since we have no choice but to choose a provider in one or two different companies, and many often times in especially rural areas it's just one provider for cable/internet. If we had more companies that sold cable and Internet, we wouldn't be seeing the problem of ridiculous prices for these services...
So, the conclusion is de-regulation is bad for consumers, but good for businesses.
Gee, I'm shocked. De-regulation basically is carte blanche to screw over your customers and not be accountable to anybody.
The whole mentality of "it's good as long someone is making profit" will be the death of us.
The 'free market' is a lie, and it always has been. Consumers don't have perfect information, and corporations will lie cheat and steal to improve their bottom line.
That de-regulation would ever improve anything for consumers has always been a big lie.
Lost at C:>. Found at C.
Once Upon a Time in America
Cheap communications has changed our society more than any other of our inventions and it has removed more tyrants from power than any weapon. Let’s take another step into the history books, back to May 1st, in 1844. Alfred Vail, working with Samuel Morse, was setting up the first telegraph line, and on that day sent the world’s first ever electronic message down the 24 miles of cable that were working, from Annapolis Junction to Washington D.C., to report the results of the Whig Party presidential nominations (Henry Clay won that nomination, and lost the subsequent election).
Just a decade later in 1855, the New York and Mississippi Valley Printing Telegraph Company and the New York & Western Union Telegraph Company merged to create Western Union. One assumes new-york-and-mississippi-valley-and-western-union-printing-telegraph-company.com was already taken by domain name squatters.
By 1900, Western Union operated a million miles of telegraph lines, and by 1945 it had an effective monopoly over the US market. As the New Yorker wrote, monopolies make spying easier. It is an easy and obvious trade: the government allows, by inaction or by intervention, a powerful telecommunications company to become dominant in a market through mergers and acquisitions. In return that company provides the government with surveillance.
The New Yorker explains how Western Union used its monopoly to serve those in power:
It is quite visible how cost gravity drove communications down from an experiment for the wealthy to a mass market product so cheap even Western Union couldn’t make profits from it. By 1980 its telegraph business was dying, and the old Western Union business was finally closed in 2006, after 151 years of operation. The name was, as we know, reused for a financial services company which today enjoys a government-sanctioned monopoly.
Curiously, Western Union’s long telegraph monopoly seems to have had only a small impact on the size of communications networks. If cost gravity was operating fully, at 29% a year, and telegraph costs were in free-fall, there would have been 37M miles of telegraph by 1900. Instead, assuming Western Union had half the market, there were 2M miles. That is a factor of 16 over 55 years, which is not much, and a part of that can be accounted for by quality improvements.
I’m also not sure what to do with the random figure of 113 million kilometers of fiber optic cable produced in 2010. A cable is a bundle of fibers, and the traffic rates are rather higher than Western Union’s old stock. Has cost gravity been working?
One smoking gun pointing to a century and half of cost gravity being hijacked by telecoms monopolies back through AT&T and Western Union is the cost of the modern equivalent of a telegraph, the text message.
My blog
The picture you paint of Europe is a little simplistic too. France has a few large cities, but the tenth-biggest one has less than half a million inhabitants. It has tens of thousands of villages with 1000 or less inhabitants. And you get a choice of cheap ADSL provider in most of those small villages.
Virtually serving coffee
Yes, yes - it's a "natural monopoly", we get it, you studied economics in college.
This whole thing could be fixed by changing the model from "pay to access" to "pay to use".
The US considers the infrastructure a fixed resource - fixed radio bandwidth allocated to certain players, fixed easements given to certain players, and so on. When you have a fixed resource, you have high access fees and discouraged use: multi-year contracts, high monthly bills, data caps, throttled access, poor/no connectivity with no guarantee, and so on.
In a "pay to use" model, the government would mandate a fixed maximum charge per gigabyte of usage. Companies with a fixed resource could increase profits only by encouraging more usage: deploy newer and faster technology, connecting more people, encouraging high data-transfer activities (netflix, et al.), and so on.
Such a change wouldn't even affect the existing players: take the total cost of internet access and divide by total internet usage to come up with a fee per-gigabyte that would give the same income next year as they get with the current system.
The difference being, now they have an incentive for service, instead of an incentive for rent-seeking.
They are a special case in many of the same ways that internet suppliers are a special case...
All that extra hardware to spy on US citizens, that cost has to be passed on to consumers. Probably why it's hard to get fast speeds too, you have to wait till the gov upgrades their backend to handle the extra workload of everyone on faster links; when they get their new spy gear in, you get another 5mb.
Waiting for an amusing sig.
If you're looking at the US as a whole, your argument is sound. Yet why don't we see these extremely fast, cheap options in places like NYC?
The big problem is that we deregulated the cable and phone companies, but we didn't remove their monopoly agreements and we didn't enforce any regulations barring them from entering into non-compete agreements. So you end up with a situation like where I live, where Cox Cable isn't subject to regulation regarding rates, services and quality, etc. but at the same time no competing cable company's allowed in (because Cox still has an agreement with the city making them the only cable company allowed to run cable on the public right-of-way), the city attorney routinely enforces that agreement (taking legal action when one of the two cable companies in the area tries to provide service in an area assigned to the other, even when that other company isn't actually providing service in the affected area), and there's an agreement between Cox and Time-Warner (the other company in the area) not to offer service where the other's already providing it. End result: all the downsides of a monopoly combined with all the downsides of completely-unregulated services. They can do whatever they want with rates, there's no legal basis for challenging them, and there's no competitor you can switch to. To fix the problem we have to remove this pseudo-deregulation: either they're fully deregulated and not allowed to bar competition from entering the area, or they've got a monopoly on service and are subject to regulation as a public utility.
There's your tax-subsidized patent-owned-by-public answer.
Capitalism drives down costs.
Mercantalism, which Adam Smith, the father of Capitalism railed against, provides large players with greater rewards for inefficiencies propped up by people who claim to be Capitalists, but depend on the lack of competition to win them billions.
-- Tigger warning: This post may contain tiggers! --
It is worse in the US than in Korea. But Canada also has bad Internet. South Africa has some slow speeds and usage caps. Also Australia and other countries.
We're neither the slowest nor the most expensive.
When all of the internet is being filtered through five or six main providers, it is easier for the NSA to funnel all of the information into its data analysis machines. Can you image the headaches the NSA would have if all the little mom and pop companies (if they were still around to do internet), would not provide for a free backdoor to the operations...
Not really. All they have to do is put their taps on the backbone servers. Since everything is routed through them, they see everything.
Understanding the scope of the problem is the first step on the path to true panic.
This old chestnut again? When are people going to stop comparing the US -- a vast geographic area with large areas of low population density -- with Europe? Or Korea for that matter? It costs more because larger areas need coverage compared to European counterparts. It costs more because rural areas get artificially-low costs because they're subsidized by urban areas with artificially-high costs.
In the end they will lay their freedom at our feet and say to us, Make us your slaves, but feed us. - Fyodor Dostoyevsky
US broadband is more expensive than a few countries.
Also the available speeds vary widely as well. The US has a decent speed overall. Given that a significant amount of content is available in the US. The real world speed in the US is significantly better than other locations around the world. See: http://www.netindex.com/
Lets also factor in region locking of content. The US generally does not suffer from the issue. Other regions around the world are simple blocked from content due to the region they are in. Again the US is at a significant advantage here.
There are a lot of other countries that are a hell of a lot more expensive than the US. Case in point a first world country Australia.
Overall the Internet experience in my humble opinion in the US is vastly superior to most other locations around the planet.
Now lets also factor in penetration of broadband and average household income. The US fairs very well indeed when you start to think about these factors. However the US is still behind some notables. Korea for some time still be the bench mark that other countries try to achieve on all fronts. Other countries are embarking on plans to significantly improve speed, bandwidth, and costs.
This article should have been about. If the US doesn't do anything to upgrade it's aging internet infrastructure it will soon be one the the most expensive and poorest performing broadband countries in the world.
Another transatlantic pissing contest yay!
In a truly deregulated market, the cost of entry for one cable company would be the same as for another. In a heavily regulated market that we actually have (at the local level) the first company had a very much lower cost of entry due to special deal with the local government.
Negative moral value of force outweighs the positive value of good intentions.
In a truly deregulated market, cable companies would split the markets to maximise profits.
FTFY.
Yes, I'm left. You have a problem with that?
Is ANYTHING in NYC cheap? Just about everything runs at huge mark up in NYC for some reason or another. Internet access is no exception.
Outside of urban areas, the infrastructure costs for internet access is much higher, but INSIDE urban areas, the costs of labor, taxes, licenses, access fees all drive up the prices.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Since the 90s most of the deregulation that has occurred has not benefited the public interest or the consumer, but instead benefited the shareholder by decreasing competition through mergers and acquisitions. Even in the recent financial collapse, we found out that there were certain businesses that were too big to fail and had to be bailed out by the government. By definition, any business that is so big that it's failure would be catastrophic to the economy and needs bailed out by the government means that there also isn't enough competition in that market.
So, sure, high speed internet costs more in the US than anywhere else, but so do most other things. After all, capitalism is for the benefit of the capitalist, not the public. That's why, previously, there were all of those regulations -- to protect the public. People forget that all of those regulations were put in place to protect against the robber barons. Well, they haven't gone away.
I will remind folks that the US has much longer telephone local loop length than other countries.
Part of this is due to more rural and spread out suburbs, earlier deployment of telephone than other countries, but part of that may be also be due to CO consolidation during the firming up of ESS.
Switzerland, where I reside, is similar in many ways (though at a somewhat smaller scale): the Zurich metro area has about 1.1 million people. Geneva and Basel metro areas are each around 500,000 people. The Bern metro area is about 350,000 people and yet the small suburb where I live (pop ~30,000 people) has a relatively large amount of competition: Swisscom (20 Mbps max) and Sunrise (30 Mbps max) each have DSL offerings, UPC Cablecom offers fiber-to-the-node with a EuroDOCSIS 3.0 coax last mile (currently the top plan is 150 Mbps max but this can increase in the future up to 400 Mbps), the electric company is running fiber to every property (it's at most homes now, with 90% availability in 5 years and 100% availability by 2020) and there's a variety of private companies that offer service over the municipal fiber. There's also several 3G and 4G mobile phone providers who offer service with varying speeds (up to 42 Mbps) and bandwidth caps with essentially total coverage.
In short: even with a relatively low-density city composed mostly of private homes and low-rise (under 4 floors) apartment buildings it's economically viable to have many competing firms providing high-speed connectivity. There's really no excuse why US cities like Houston, Phoenix, etc. shouldn't have a good amount of competition in regards to connectivity.
If anything, I'd posit that super dense cities like NYC and the like would be more difficult to run high-speed connections particularly due to the huge amount of legacy lines and equipment (e.g. gobs of twisted copper pairs in cable ducts where a modern fiber line would use much less space but replacing the copper would be disruptive and expensive) and the inability to just plop down equipment as needed due to limited aboveground space. In a lower-density city there's probably more room in cable ducts, places to put above or below-ground equipment boxes, less legacy cruft, etc. that should make it easier to build out high-speed networks and provide competition to customers. Ideally, things could be simplified by having a municipal fiber network that's owned and managed by the city (or, if they must, a contractor) but has service provided by competing private companies over that fiber.
No, In a truly unregulated market the barriers of entry would be higher for new entries into the cable market. It is one of the justifications used for regulating cable.
Look up the term “Natural Monopoly”. In any industry with high fixed costs and low marginal costs market structure will favor only one provider. If a challenger faces an incumbent, the incumbent will just drop prices until they drive out the challenger. They don’t need to pay for the high upfront capital costs – they have already done so.
And while it is a valid reason to regulate I am not saying the cable companies haven’t captured the regulators to entrench their position – they have.
That way, just like the letter I just got from my health insurance company, I can enjoy "more choice" and see my rates triple. ObamaCare is enough. I don't want ObamaISP, too.
Don't disappoint your bird dog. Go to the range.
A perfect example would be the way AT&T was allowed to start pulling itself back together after the trouble was taken to split the beast apart. It wasn't long before they were happily providing the government with taps into the backbone if the Internet. This is the paradox of people who scream for deregulation and rail against big government. They don't want the government to have too much power (perfectly understandable), but don't have any qualms giving ALL of the power to oligopolies which then collaborate with the government, thus giving them infinitely more power than the "onerous" rules and regulations ever would.
Don't feel bad.
That's only $5 more than I pay for 10mbps -- or $15 less, if I hadn't decided to tell them to go piss up a rope when they tried to jack the static IP surcharge from $5 to $20...
Except France's small villages are extremely close to each other.
France (not including it's territories) spans 213,010 square miles and has a population of 63,460,000. A population density of 297.92 people per square mile.
Comparatively, If you take the US state I live in and an adjoining state (Arizona and New Mexico), they span a combined 235,587 square miles (comparable to France) and host a combined population of 8,638,538. A population density of 36.6 per square mile. And like France, there are only a few large cities (large is relative).
And beer, don't forget beer!
Then NYC, Los Angeles or Dallas/Fort Worth should be offering cheap internet access from several dozen providers, right? Given their density...
It's already heavily regulated and that already happens. Time Warner Cable and Comcast made a huge deal in California in recent years and sold each other their exclusive contracts for certain cities in order to organize their infrastructure appropriately. The problem is that the best regulation was dropped(ability for broadcast networks to own cable networks and vice versa) while all of the other regulations stayed(must carry, etc) and many of those promote conglomeratizing the industry.
Natural monopoly is a myth. A city could bury conduit under its streets and charge a reasonable rate for pulling copper or fiber.
I've been paying about the same for a medium-tier broadband service in a number of cities and for a number of years. At this time I am paying $30 a month for what used to be a 15Mbps service to Comcast. The catch is that it's a 6 month deal, it will go up to $40 a month for the next 6 months, and towards the end I have to perform the usual "I am leaving for ATT" song and dance to get the deal again (I have not had to actually switch yet, but might at some point - ATT service is priced the same, though they try to rip me off another $5 a month for equipment.
I also did a quick survey of what broadband services cost in a deregulated place like UK. Here is a link for Glasgow (because I like it :) ): http://www.cable.co.uk/local/broadband/glasgow/glasgow/
Note that prices on the right are for service from a provider and users still have to pay "line fees" (because, much like elsewhere, no one will put a second set of cables in the ground, so infrastructure is shared). If you click through on any of these deals, the total price with line fee for a 1 year contract is about 17-20 GBP which translates to approx. $30 for the same 15 Mbps service.
I don't know - I think we are on par here.
It'd be nice if Comcast didn't make me go through the silly annual rejection cycle, of course.
Yes, the government does infrastructure really, really well.
Anything where the service can't be created by anyone.
Infrastructure is pretty much always cheaper for the consumer when the government does it becasue they aren't using it as a monopoly to boost profits. It's run a 0 +/-2% or so.
The Kruger Dunning explains most post on
Why is Broadband more expensive?
Why do we pay more for healthcare?
Why is our productivity so high compared to real wages?
Why does our government spy on us and disregard our civil liberties?
Why are we below the average in ability according to OECD?
Why is the gap between the richest and the poorest on par with that of African countries?
And finally, why the fuck do people keep telling me this is the greatest country on Earth?
I want to be proud for my country and what it stood for, but it's hard to see nowadays.
How many cable companies are you going to put up with digging you your street and year becasue each on has to lay it's own infrastructure?
The Kruger Dunning explains most post on
$100USD for 50MBps? Americans are seriously complaining about getting those kinds of speeds for that amount of money? I would do unseemly things for those internet speeds! Here in Australia we can get 12MBps MAX (top of the range) at about the $100 mark per month (and AUD almost equals USD these days) with heavy download/upload limits on our aging, unreliable copper cable network. America has nothing to complain about. In fact, they should be lobbying to help us poor Aussies. http://goo.gl/OXkz5t And that's in the CBD. Anyone outside the CBD is practically on dial up. It takes me several hours to download Ubuntu whenever there is a new iso and watching a youtube video in HD renders the internet unusable to all other devices in the house. Yeeeeees there is a new broadband network being implemented (which is outdated technology in itself), but our new "elected" government is considering pulling it out and keeping the crap we've got now instead.
...13 years ago.
13 years I had one choice, DSL, and it was $79/month for 768k/256k asymmetric on the ISP side and then another $20 a month on the telco side. 1 static IP.
Now I pay $72 per month and get 15/5 Mbit and get 5 static IPs. It was $69/month for the last 3 years but crept up $2/month in the last month (no explanation on the bill, just a bigger number).
It sounds like in absolute dollar terms I'm paying about the same price, but I'm getting more than 10 times the download speed and static IPs aren't getting easier to obtain, plus the numbers above aren't corrected for inflation.
I'm really surprised Comcast hasn't jacked the price up horribly -- the ONLY competition they have is CenturyLink who have done pretty much nothing to boost speeds/lay fiber/etc and the municipal wifi network which I think is likely to be not much better if not worse than LTE. Hell, half the time I stay in a hotel I end up ditching the low-rent wifi they offer for the personal hotspot off my LTE smartphone.
Plus, Comcast MUST be facing constant pressure on their network. I hear people in densely populated hipster neighborhoods gripe about slow throughput but I can never tell what that might be.
Is ANYTHING in NYC cheap?
Insults are you moron. Now get the fuck outta the way, and let the real men talk you limp-wristed panty boy...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Articles after articles, we learned that Australian internets/ISP/regulators are the worst in the world. That doesn't make other networks better...
In the neighborhood I life in, I can't get FiOS and the AT&T DSL options are a joke (they won't bother putting in capacity). So if you want anything but *shudder* dialup, your options are Warner, Warner, or... Warner.
I'm interested in why you can't move to a competing neighborhood.
If you live in London, Manchester or one of the other big UK cities, you will have a huge choice of different providers, and it will be very cheap. If you live in a croft in the Scottish highlands, then you will have to pay a lot of money for satellite broadband.
I can understand that if you live in a ranch the size of Wales, you can't expect much in the way of public utilities such as broadband, but if you live in a big US city such as New York, the population density is similar to UK cities, so you should expect the same level of service.
Should try Australia. Prices here will make you swallow your tongue!
I was wrong.. TALK is cheap in NYC...
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
Greed.
I am French and I currently live in Arizona, and your logic seems a little bit bad because YOU DON'T NEED TO PUT CABLE/FIBER TO EVERY METER SQUARE IN UNINHABITED LAND. You just don't need to have fiber to every stone in Grand Canyon or Monument Valley but you DO NEED TO HAVE IT in Phoenix, Tucson, Flagstaff, etc.
The population is clustered in such a way that it is easy to connect them.
Yet :
For 20Mbps here (in the center of a 500K inhabitants city) : 56$/mo (that's without TV or phone).
For 25Mbps in France (in the center of 20 houses village, 3Km away from a 8K inhabitants city) : 49.71$/mo (which also includes free and unlimited calls to more than 100 countries and cheap mobile phone plans (2hrs voice, unlimited text)).
Compare New York to rural Finland. You're still getting screwed.
Is 1563649 a prime number?
It's going to take a while for that. The existing infrastructure put in place by previous monopolies by the telephone companies and the cable companies make it hard for any new competition to start up. There are significant barriers to entry. Maybe wireless will do something or Google will go crazy with fiber but i would not hold my breath.
Honest words from a political spokesman...really news.
When is the last time the government was so honest in a public statement?
I think we've pushed this "anyone can grow up to be president" thing too far.
Cities compete for your residence. If your city sucks, you could try moving to a different city that does a better job of competing for your tax dollars.
please use common population density, and not 'the whole US'.
The Kruger Dunning explains most post on
Charging by the byte, kilo, mega or gigabyte is a draconic and totally outmoded business paradigm. Unfortunately telcos will never break that paradigm because they are far too stuck in their ways to believe anything else besides that business model. No matter what anyone says, it does not cost the telco to transmit more data.
I pay $30/month and get 60+ Mbps. So, those numbers are certainly not generally true for the US. Maybe Internet access in San Francisco is particularly expensive, or maybe they just screwed up on selecting their plans.
...broadband. One guess who lobbied heavily for those laws.
Never let a lack of data get in the way of a good rant.
Thats like saying we need individual roads for every home delivery service......Public owned conduit solves that nicely.
Good-bye
If your choice is a. expensive crappy internet from one company, b. expensive crappy internet from the other company, or c. no internet, you're probably going to choose expensive crappy internet. So what motive do either internet companies have to make their internet cheaper or faster? None.
I miss the days when ISPs were actually allowed to have real competition.
Funny, and arguably accurate as well!
Three Squirrels
Yes, running broadband in the USA costs more per household than some of the cheaper countries mentioned, on average. However, since there is no regulation, you'd expect the locations where you actually have a population density to be thriving with competition and low prices.
This is where legislation comes in. In at least Europe, there is a law mandating that there should be a fair and actual competition going and if there isn't, the government gets to set a price for whatever company chooses to provide service, will have to deliver that service. It's not a perfect system and companies still make way more than you would get with a truly competitive market, but at least it's limited.
Here in the Netherlands we basically have two cable companies that divided the country in 2 regions (a few niche players have less than 10 percent of the country) and one former state owned telco that owns the copper pair stuff. That company is mandated to provide access "at cost price" to any ISP that wants access, but they managed to both add a lot of charges to whatever "at cost price" is and also for the uplink point and all that. To add insult to injury, they own most of the glass fibre FTTH stuff and are pulling a similar stunt there. In practice, that leaves most homes that have access to broadband a choice between 2 parties they have to depend on. One of the two cable companies and the former state company. If they choose to not go for cable, they are still going to be using the former state company, even if they get their IP connectivity (and a single bill) from another ISP.
That leaves us with basically at least two major competitors for over 80% of households, that all offer triple play services at a price point starting around 30-40 euros monthly. For that, you typically get 20Mbit or so in internet access (or less if only lower speed DSL is available in your area) some free minutes to selected phones and about 50 channels of digital television. If you're willing to pay around 100 euros monthly and if you can get it, you can get up to 500/500Mbit (yes, that's 500Mbit uplink) with no data limit. I think the current coverage for that is around 15-20% of the people in the Netherlands.
This may sound like a dream to most people in the USA, but believe me, there's a lot of "we're not going to offer anything more competitive if they aren't". There's nobody offering single play internet at the highest speeds, or an a-la-carte solution that would be in place if there was more competition. These three companies more or less are making all the profit that's in this market and the rest is there just as a vehicle to deliver the money to them. Since the cable companies are not mandated to open up their network to third party providers, only two competing companies per household is obviously still not enough to get a truly competing market. The prices are a lot better than they are in the USA, but all three are showing "very healthy" profits and that's not what you'd expect if there was a permanent cut-throat competition going on.
It's about time the USA stopped worrying about communism or "too much regulation" and started to mandate price limits unless at least three independent services would offer full service for something as important as access to the internet. We're past the point that it was a luxury and a hobby thing; you are deprived of many benefits if you don't have a broadband internet connection these days. Just as you want running water, electricity and some sort of sewage system in your home. If a single company would win a contract to be the only gasoline provider in an entire state for 10 years in the future, people would revolt. When it's about internet access, there should not be a difference, even if it's only a single municipality. You can get get gas in the next town, not the next state. With internet, you don't have the luxury to travel to get some, so every home in the USA should have a choice between several providers.
I'm not saying the USA should slavishly copy Europe, but the
I was promised a flying car. Where is my flying car?
Something I've noticed is that in a number of Asian and European countries, you see ISPs that operate and sell lines line giant WANs. You get a really fast connection to them, but it is way oversubscribed on the backhaul and you don't see that off-network.
For example a few years ago I remember a gentleman from Japan here on Slashdot who was talking about his fast 100mbit Internet connection and how he could download a CD in like 8 minutes. I had to point out that is the kind of speed you get form 10mbit, not 100mbit, and indeed my 12mbit Internet downloaded it faster.
So you do need to make sure you are doing real apples to apples comparisons on speeds. A lot of the amazing Speedtest results I see are people testing to a server on their own ISP which is fine for internal testing, but says nothing about overall speed. When I test my link, I always test to an ISP in another state, about 500 miles away, to verify that indeed I am getting my bandwidth to the larger Internet, not just to things near me.
I'm not trying to say that this means the US is great, but it is a complex issue. I can offer you really cheap "gigabit" Internet... just so long as I don't have to have the backhaul to support it. I can build a gigbat WAN pretty cheap, and even have a local Speedtest server you can use, but it'll cost me a lot more if I want the backhaul to really support those kind of speeds.
No, he covered that bit. It's under the part about how the US is sprawling and has a low population density - Neither of which describes France. Their 'tens of thousands' of villages are crammed into an area that's a small faction of the size of the continental US.
Read comprehension, get some.
Now crunch the figures for Sweden or Finland.
Also FatPhil on SoylentNews, id 863
That, and child labor in crumbling factories in Bangladesh. Another consequence of lack of government oversight.
What I got out of the Mises article was that much of the mess that utilities are in comes from cities' failure to set an efficient price for access to the rights of way that it owns: "Benevolent and enlightened politicians, even ones who have studied at the feet of Harold Demsetz, would have no rational way of determining what prices to charge." I recognize that it'll be impractical as of now for cities to give up their ownership of rights of way, and instead, I set forth a technical solution that a city could put in place to allow more efficient access to its rights of way by competitors without disrupting travel.
during the dot.com boom, so the heavy lifting of connecting our far-flung nation is already done. And much of it is still dark, waiting to be used.
Never let a lack of data get in the way of a good rant.
Unregulated greed.
There is no other reason for it.
Do not look at laser with remaining good eye.
$20 for broadband in the US?! Where? I can get very crappy(Netflix basically unwatchable) dsl for $30, or cable for $60.
Never let a lack of data get in the way of a good rant.
That's ridiculous. I used to install pipelines and wells beneath roads in southern California. That's a much slower and messier process than laying underground cables (I know because we did that too). Believe me, the residents did stand for it. To them it's just more road work. It would be easy for a company to lay new subterranean cable, and it would be even easier to place it above ground.
If they're already doing the expensive part, they might as well do the cheap part and run the fiber.
Just because the conduit is a natural monopoly given city ownership of roads doesn't mean that the service lines running through the conduit can't be competitive. To increase competition, properly identify the natural monopoly and contain it.
That still leaves a lot of legacy area where there is no conduit currently.
Roads need periodic repair. Storm drain lines need periodic repair. Conduit modernization could hit those areas first and eventually cover the whole city.
Meanwhile, it is notable that several broadband providers HAVE chosen to divide up territories rather than competing head to head.
In other words, they're playing the prisoner's dilemma. Under efficient conduit access, a firm entering the market could choose to serve areas along the border between the territories.
But what kind of simpleton hasn't heard of the countries Sweden and Finland?
It would be too easy to suggest that such geographical ignorance was a US trait.
Also FatPhil on SoylentNews, id 863
According to Wikipedia:
I am not a big fan of US telco's, but I think the numbers listed clearly indicate that the markets for the three listed countries are dramatically different.
What we've got today is Corporatism, mixed with a few dashes of Socialism, with a "candy coated surface" giving the shiny appearance of Capitalism.
Truth is, China has more real Capitalism than we do here in the U.S. If you keep your head down and don't run afoul of the government there, you're basically free to do as you wish with a business. Hardly even much to worry about in the way of environmental or safety regulations..... (Why do you think so many businesses traditionally considered American have huge factories over there? The CEO of Coca Cola, not too long ago, declared he'd never be interested in any more company growth inside the U.S. borders. All the real opportunity is elsewhere.)
The mantra was that it made things cheaper. Now you know.
The #1 reason US broadband sucks is because companies that make big bucks selling you TV want to keep it that way.
The cable companies are willing to spend big bucks keeping competition out. They see the Internet as a massive threat to their business model of selling linear TV channels (and they have Hollywood in their corner who see better broadband as being good for the "pirates" who "steal" their content, especially if its broadband run by entities that wont play ball with their "anti-piracy" plans and programs like Google or a local municipality)
If you want a great example of what the cable companies are doing, look up the deal Verizon and Comcast did where Verizon agreed to stop rolling out FiOS (which basically hands Comcast a monopoly on high speed broadband in most of those areas)
More developed countries are cheaper, why is this news?
I live in Argentina. I pay 60USD for 3MB. Some (worse serviced) ISPs offer 5MB for that price.
South Korea is first world, and a VERY developed country, it's only natural that it's chepear than countries that are not.
Sometimes the invisible hand flips you a quite visible finger.
http://en.wikipedia.org/wiki/Nash_equilibrium
there is no reason an ogilopoly has to achieve the maximization of global utility
How many cable companies are you going to put up with digging you your street and year becasue each on has to lay it's own infrastructure?
But then who will build the roads?!!?
Seriously though, why does it matter? I may only want one per year, others may want one per decade. The number is irrelevant to the discussion. You're basically using a utilitarian argument. "Oh, it's better that we only have one competitor because that's the easiest and most practical solution." Meanwhile, the only reason you're asking your question is because you can't fathom how this situation can play out; where some snappy young businessman will solve this conundrum for us at a price we are willing to pay.
In the US telco companies are required to lease their plant at wholesale rates to competitive exchange carriers. This deregulation is what gave us unlimited long distance and voip. In most areas of the country DSL that can be leased on a wholesale basis is quite slow based in technology issues. CLEC's are mostly stuck buying bare wires from the customer premise to the local telco exchange, putting the loop distance in the ADSL range. They have kept CLEC's out of their VDSL and fiber products due to how the telco deregulation law was written. If we want faster broadband we need to modernize the telco deregulations to include cable companies and vdsl/fiber products. There is no reason who comcast can not lease several blocks of 12 channels to competitors on a wholesale basis to run docsis 3 over. Comcast and other cable co's are very inefficient with their bandwidth and with SDV and an all digital cable system there should be no issues.
I'm currently paying around $80us a month for a land line and 100Gb of 8M-bit broadband.
Fran
:):):)
1st 1st Poster of the new Millennium!
My options were Time Warner and Time Warner. Guess which one I picked?
10 years ago you were still considered "lucky" to get broadband at all, so I'm not sure why they can blame it on 10 year old deregulation for a market that was largely in its infancy.
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
How many phone companies can run land lines in a given area by law?
Typically 1.
Shockingly one telephone company tends to dominate a given area.
How many cable companies can run cable lines in a given area by law?
Typically 1.
Shockingly one cable company tends to dominate a given area.
These are government backed monopolies. Small towns have tried to set up their own internet and have been sued by major telecoms because they have a government backed monopoly.
Remove those limitations and areas with high costs will have little ISPs pop up that serve just a small community and nothing else. Little guys that run their own cable from the trunk to the home/business. That is how you fix it. US internet access is not expensive at the trunk. Its expensive in the distribution because the government forbids competition.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Actually it has more to do with government interference in the market and the way spectrum was licensed and then sold at high costs by the FCC. As a result at one time there were like 300 little fiefdoms of bandwidth in cellular traffic. Which is one reason we tend to lag on cellular and one of the reasons WiMax and friend don't catch on for wireless broadband throughout a citywide area. Too many companies have paid to much for spectrum that they nickle and dime us to recoup. On the cable stuff the monopolies granted in an area are very anti-competitive. So a Comcast can charge like 97% profit rates for home internet.
The answer to the existing problems is most certainly not more regulation. It is getting government as out of the business and dropping some of the monopolies.
You only need 1 phone [or cable] line to service a entire block.
Provided that the entire block is being serviced in an efficient way. With one provider, this efficiency cannot be guaranteed.
if there were a competitor a fierce price war would start up until there was only one standing.
Sometimes we need a price war to keep the price of entry-level service from rising faster than inflation. And sometimes different providers can compete on varied services over their respective wires. If an ISP is only interested in providing "consumer" service (tiny upstream, inbound connections strongly discouraged or outright blocked), that leaves an opening for another provider to differentiate its service by providing more symmetric "enthusiast" and "business" tiers.
How much does it cost to bury and maintain conduit?
That depends on whether your city's residents rely on well water and septic systems. Otherwise, as Belial6 pointed out, you could extrapolate from how much it costs to bury and maintain water, sewer, and storm pipes.
Our series of tubes is clogged with bullshit:/
The problem is that all communications in the world is routed to the NSA and someone has to pay for all that bandwidth.
Excuse me, but please get off my Pennisetum Clandestinum, eh!
" If you want LAN speeds in the much less densely populated US, it is going to be very costly."
Why not start with the high density areas first? The thing about low density areas is that MOST PEOPLE DON'T LIVE THERE.
New Jersey has 25% greater population density than Belgium, and over twice the density of Switzerland. How to the low density portions of the US explain why New Jersey can't have it as good as Belgium or Switzerland?
"Is ANYTHING in NYC cheap? "
Compared to Zurich? Everything.
But in France we had the most expensive Mobile Phone Bills in the world. Because the major companies made an confidential agreement to not change their prices.
And then another company entered the game, and now we have very low mobile phone bills.
It's the same company who several years ago made the ADSL prices drop:
http://en.wikipedia.org/wiki/Iliad_(company)
If the USA were a free market there would be competition that would lower prices over time. Corporations have co-opted the government & created a captive market of middle class yuppies they can bleed dry with regulatory capture. All the worse markings of oligarchy & plutocracy rolled in to one giant propaganda machine draped in an american flag swearing allegiance to Wall St. profits.
Essentially: we live in Fascist Italy.
US internet is expensive because regular users have to subsidize heavy users. It's also why you get particularly slow internet service.
I find it amusing so many people find this to be a big conspiracy or even a mystery.
I will solve it with 4 lines.
France: Population Density 118/sq km.
UK: 257/sq km
South Korea: 508/sq km
US: 33/sq km.
Come on, people. Work with me here this isn't complicated. Of course there are other factors but that right there is a big one.
There is competition ALL over the UK. There are basically TWO levels. Nationwide using the BT infrastructure to the ISP
Then there is what we call LLU (Local Loop Unbundling)
This give the right for an ISP to put their kit inside a BT exchange and take over the operation of your phone + internet completely. If the line between your home and the exchange goes wrong then your ISP calls BT to fix it under contract. This is all regulated.
I live in a town of some 50K people. I can choose between at 6 different LLU providers and one Cable (Virgin Media).
BT have put Fibre into the local distribution cabinet so I get
80Mbits down/20Mbits up/250Gb per month 08:00-23:59, unlimited for the rest of the day + phone with all calls for approx $50/month including 20% VAT.
Most of the people who live near me are on Virgin Cable so I downloaded Window 8.1 the other evening at 5.5Mbytes/sec.
I can't complain really.
I'd rather be riding my '63 Triumph T120.
US broadband prices are the lowest in the world because the free unregulated market and zero government interference give companies incentives to compete on service and/or price ensuring US consumers get the service they want at the price they wish to pay.
ANYONE who believes anything else is an enemy of the state and will be re-educated through being forced to watch American TV 24/7 with 23/7 commercials.
In posts commenting (and damning yourself) please include your service number for easy matching by your friendly NSA agent.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Not sure about the USofA, but in Europe doing this is illegal. And with illegal, I mean there is not only government oversight but also sanctions when companies do this.
The most relevant in Belgium is that there have to be three cell phone operators. When one bought a competitor (due to buying the European company) they were forced to sell the Belgian part.
Another relevant part is that there is a law of the maximum price of roaming. And I can assure you those prices were not higher that what you were charged.
In most countries the cables must be accessible for all competition. Unfortunately not enough do this.
The only special thing about the telco's (and ISPs) is that they do not need to follow the same regulations.
Regulation can be used for the good as well as for the bad. And what Europeans look at is mostly that if it is good for the people, it should be implemented. Companies will (with competition) work out how to make money. Might not be the same companies. Might not be in the same way, but somebody will make money of from it.
Don't fight for your country, if your country does not fight for you.
those stickers on everything claiming the product only causes cancer if you live in California.
Do you have a picture of one?
The ones I've heard of say that the product contains chemicals which the State of California knows cause cancer.
So the stickers don't say the chemicals don't cause cancer elsewhere, just that other states have not recognised their carcinogenous properties (or have recognised them but chose not to require a warning to that effect).
Esli epei etot cumprenan, shris soa Sfaha.
Internet infrastructure is just as vital as roads, water and electricity, and it can't be left to be run by private monopolies. Here in sweden, it's very comming with metropolitan fiber networks that is owned by the county/municipal/city, and then the ISP's rent capacity or channels to delivier to end-customers. This keeps prices low and competitive. My friend pays $15 for a 100/100 Ethernet with a static IP. Traffic caps doesn't exist at all. The swedish then state-owned Telco did a lot of important job in the 80's and almost converting all long-haul links to optical, and so a nationwide data-highway was born. Nowadays several ISP's/Telco's uses the same paths with their own equipment and cables. Socialism internet is great.
free markets regulate themselves when left to their own devices *schadenfreude*
I had to scroll for ages before I found a funny comment....
The idea of a natural monopoly *sounds* great. But I don't think it holds up under scrutiny. See the myth of the natural monopoly.
Considering what google is doing with fiber, I think the 'natural' monopoly of telcos is as natural as the car dealership problem Tesla is facing in Texas.
If it was truly a scarce resource that one company had monopolized. Then that company should be broken up into competitors and seperated from the businesses that depend on it (so the few companies that control it, don't also own the businesses that depend on it).
One last thing: Sometimes I wonder; "Is that someone's signature? Or do they type that at the end of each post?"
...In a sense, when we agree to pay for home internet service, we are saying "your prices are acceptable". I bet if we had enough people refusing to pay what it currently costs for internet access, you would see companies suddenly dropping their prices in order to get the customers they need to sustain themselves. However, knowing the under-40 population of this country, I am going to be told I am insane and it is impossible to live without internet access.
"Captive Audience" by Crawford she spends maybe 5% or so of the book explaining WHY we get bent over the barrel for net services in the U.S. It's because of our economic model - charge all the traffic will bear. But it's also because it's COMPLETELY unregulated. She put forth that it costs Comcast maybe $2 per month to provide the net service, yet they charge close to $60 for it. And this is true of all the others - including at&t, Cox, et al. We need people in the FCC that aren't lawyers but engineers and techies, and then move net services into common carrier status. Fully regulated. Then you'll see pricing come back into reality.
A guy with a shotgun is going to jail. That is silly. Do deeds even grant you the right to stop pipes from being run under your property? I know many deeds do not includes mineral rights. Even if they do, I would think eminent domain would be used for the public good there.
One last thing: Sometimes I wonder; "Is that someone's signature? Or do they type that at the end of each post?"
There is an illusion that it costs more for you than the rest of us. It is caused by very artificial exchange rates. These rates also make you think that you are more highly paid in comparison to us.
For example, 1 UK pound exchanges for about $1.60 but you cannot buy as much with $1.60 as I can with a pound. A more realistic exchange rate is from $2 to as much as $2.50 to the Pound.
If you compare your prices and your wages using this, you get a different view about comparisons.
I'll see your Constitution and raise you a Queen.
"We deregulated high-speed internet access 10 years ago and since then we've seen enormous consolidation and monopolies, so left to their own devices, companies that supply internet access will charge high prices, because they face neither competition nor oversight."
And the giant DUH! Award goes to the obvious.
Let me fix that for you: "US More Expensive than Other 1st World Countries". I am in Brazil and I pay U$ 160,00 for 50 Mbps. In fact, I pay that for a 50 Mbps last-mile link, because my real Internet download performance hardly comes to that. We have a national regulation / monitoring agency (Anatel) that watch broadband services and, surprise, carriers always miss their monthly performance targets.
There is no oversight in clothing market and yet you can buy a shirt at Wallmart or Ross for $5 or shoes for $10. Why don't they charge $100 for a shirt and keep the difference?
Low barrier to entry is why. And I'm not talking about regulation. You can start a clothing business with $10.000 and sell world-wide. But if you have to lay down your own last mile network, then starting an ISP will easily cost you 1 billion just in civil engineering and equipement, and that's just for one large city like Chicago.
It is not government oversight that drives prices down but competition.
You say that as if competition always exists and the government and regulations can only prevent it. But, in the ISP case, the barriers to entry are much lower in countries where the government enacted regulations that force the owners of the last mile cables to let their competitors install their equipement in their telephone exchange. Then instead of having to spend billions duplicating the existing last mile copper network, new entrants can focus on their backhaul network, peering agreement, and providing new services like unlimited phone calls, TV over ADSL, WiFi hotspots, etc.
Most natural monopolies fail because of a huge shift in the market (cell phones displacing landlines) or the incumbent is truly incompetent.
Sometimes it's a bit of both, such as cable and fiber providers displacing DSL because local loops in the US tend to be so long that DSL can't exceed 3 Mbps down. For comparison, the FCC defines modern broadband as 4 Mbps down.
I can’t see how much value “business class” would add.
For possible arguments, look up the comments to previous Slashdot stories about ISPs imposing caps on home subscribers and not letting them run even low-traffic servers. For businesses that need more nines of reliability than a home, there's also value in using a second ISP as a backup.
Your differences have to be of a greater value then the benefits inherent with the incumbent’s natural monopoly.
When the cable ISP also owns several major cable TV networks, it subtly manipulates the cable Internet service in its service area to discourage Internet subscribers from terminating TV subscription. At various times, Comcast has instituted cap policies that run the meter even during non-congested hours to discourage use of competing video on demand providers such as iTunes, Amazon, and Netflix, and it has shunted traffic from competing video on demand providers onto its more congested lines. And plenty of cable ISPs have inflated the price of their home Internet plans so that they can offer pay TV for negative additional charge to Internet subscribers. A competing ISP could promote its lack of conflict of interest.
In a truly deregulated market, the cost of entry for one cable company would be the same as for another. In a heavily regulated market that we actually have (at the local level) the first company had a very much lower cost of entry due to special deal with the local government.
This is wrong at two levels. First, when technology was new, a monopoly was sensible, to ensure access to telephone for most people, because building lines was expensive. Building lines in a city may be profitable, but not in rural areas. A monopoly can force a entity to provide coverage both places, in exchange for a (limited) monopoly. So yes, the community can indeed be better of by granting a monopoly in some situations. Second, even if it's a free market, the first actor will always have the upper hand, as they have more potential customers to pick from, and it is more unlikely that a customer will switch once they have a provider. Building a copper/fiber network to the curb is damn expensive, so not many players are able to this. So if we'd not have monopolies, we probably woudn't have as good coverage, and if we didn't have monopolies, the first player would still be favoured. Norway also had telco monopoly, building the network up to ca. 1995. But the government owned telco has been regulated into providing the copper for other DSL telcos, for a fixed price (~10$ month per customer), and the other DSL telcos can rent rack space in Telenor's facilities for installing DSLAMs and so on.
Assembling etherkillers for fun an profit
...labor unions.
They drive up the price of construction and maintenance of new equipment.
Source: I'm a former telco worker
There are 2 groups of people you can make fun of on the Internet without fear of attack. The illiterate, and the Amish.
In the mid-nineties, I worked for Ameritech, one of the Baby Bells (now swallowed by SBC, er, now ATT). When the deregulation bill came up in Congress, our Division President sent orders down to all that he wanted us to contact our Rep and Sen, and ask them to support the deregulation. AND HE DEMANDED COPIES OF OUR LETTERS. And if you don't think that was a threat to our continuted employment, you're amazingly naive. And, right after starting, they brought us into a meeting where they were trying hard sell to get us to contribute, from our salary, to their PAC.
Yeah, our representatives, right.....
mark
Decentralize USA into https://en.m.wikipedia.org/wiki/Cantons_of_Switzerland
Casteism
BS, it's price fixing, either specifically or just an "understanding" among providers. In my town we have Verizon FIOS, Verizon DSL, Comcast, and RCN. So with 3 major providers of high-speed internet (DSL isn't high-speed) there should be some competition. But no, the cost is the same as in areas that have only one cable provider and Verizon DSL. This doesn't fit with a fair market, and it's not because of deregulation which would be nothing but government price fixing. We already have price fixing, we don't need to add government and increase our costs with government fees and taxes. Add to this that when you work out a speed/feature comparison the cost of all three are surprisingly (sarcasm) close.
.......because of all the political corruption? Because our government works on the pay to play principle? Because a few hundred thousand in political donations commonly turns into hundreds of millions in profit? Or is it because Americans are the stupidest smart people on the planet?
The homeowner should pay for a conduit pipe from street then comm vendors can bid to use it by fishing conduit wire thru it to home. This would drastically reduce the price of upgrading services and even allow more than one provider at a time. The problem is cronyism on the local level with Cable deals from the 1970's and then Federal rules that favor the incumbents to collude.
You've shown nothing. Australia's Internet access is not much better than the US's. And only having to wire like 2 cities is no big task.
That research done by the New America Foundation’s Open Technology Institute clearly does not cover Brazil. Even the highest prices, like the one practiced by Comcast in Chattanooga, TN, sound like common-place in Brazil. It is no wonder The Economist's "Big Mac Index" lists us among the six most expensive. It seems we will get the most expensive PS4 in the world. Taxes here are a bitch.
Can you answer this WITHOUT YELLING?:
Which scenario has the greater cost/revenue benefit? (thus allowing for lower costs to consumer):
1) Wiring up and connecting 5 towns in a 100 square mile radius, each with a population of 10,000 people. That line you run out to each town services 10,000 people each!
2) Wiring up and connecting 5 towns in a 100 square mile radius, each with a population of 1,000 people. That same line to each line only services 1,000 people.
Both scenarios require similar amounts of infrastructure in place, but one scenario offsets the cost with more revenue. If you can do that, you can lower the cost per customer... Higher population density = more revenue/cost.